Governors wary of Medicaid cost shift in Senate health bill

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In this April 4, 2017, file photo, Ohio Gov. John Kasich delivers his State of the State address at the Sandusky State Theatre in Sandusky, Ohio.(Photo: Ron Schwane, AP)

COLUMBUS, Ohio (AP) — Governors in several states that opted to expand Medicaid under former President Barack Obama's health care law are wary of the Senate Republican plan to end the added federal funding for it within seven years.

The proposal released Thursday calls for a slower phase-out of the Medicaid expansion than a bill adopted earlier by the House. Yet it still would force those states to figure out what to do about the millions of lower-income Americans who used it to gain health coverage.

The doubts about the latest plan from Washington came from Republicans, Democrats and the nation's one independent governor.

Trying to keep the expansion without added federal help could blow a hole in state budgets.

In Oregon, lawmakers this week passed a health care tax intended to fix a $1.4 billion, two-year budget deficit attributed largely to Medicaid expansion costs. Those costs are rising there and elsewhere even with the federal government paying for most of the expansion, largely because more people signed up than originally expected.

"We anticipate it will be hundreds of thousands of Oregonians that will be stripped of health care under this proposal in order to get a tax break for wealthy Americans," said Oregon Gov. Kate Brown, a Democrat.

That was a reference to other provisions of the Republican plan that would cut taxes by nearly $1 trillion over the next decade, mostly for corporations and America's wealthiest families.

"I have deep concerns with details in the U.S. Senate's plan to fix America's health care system and the resources needed to help our most vulnerable, including those who are dealing with drug addiction, mental illness and chronic health problems and have nowhere else to turn," Ohio Gov. John Kasich, a Republican, said in a Twitter message.

Kasich was part of a group of Republican and Democratic governors who wrote a letter last week to Senate leaders calling for them to work in a bipartisan way to revamp the nation's complex health insurance policies.

Another was Nevada Gov. Brian Sandoval, also a Republican. His decision to expand Medicaid has provided health coverage to more than 210,000 Nevada residents.

"It appears that the proposed bill will dramatically reduce coverage and will negatively impact our future state budgets," he said in an emailed statement.

Part of the Obama law was an offer to the states: If they would expand Medicaid, a joint federal-state insurance program for low-income people, to a group of slightly higher-income adults, the federal government would pick up the entire tab in the initial years. The federal share drops to 90 percent after 2020.

The expansion has provided coverage to 11 million people in the 31 states that accepted it.

The Senate bill calls for phasing out the enhanced federal support for the expansion by 2024. The House calls for doing it by 2020.

In both plans, states could keep coverage for the higher-income adults, but federal taxpayers would not continue to pay a larger share of the bill. The Senate bill also calls for a tighter cap on federal spending in Medicaid overall than the House bill did. Currently, there is no limit on how much the program will pay for care for those enrolled.

In addition, it calls for extra federal funding to be awarded to states for addiction and mental health treatment, services covered by Medicaid. Both chambers would have to agree on details for the bill to be sent to President Donald Trump.

In Montana, 20 percent of residents didn't have medical insurance in 2013. By last year, that was down to 7 percent. Gov. Steve Bullock, a Democrat, attributes the higher coverage rates to the Medicaid expansion and said the Senate bill would undo that.

Charlie Baker, the Republican governor in heavily Democratic Massachusetts, and Tom Wolf, a Democratic governor in Pennsylvania, had similar concerns. Governors also said the bill could hurt rural hospitals and senior citizens who have nursing home care covered by Medicaid.

Former Arizona Gov. Jan Brewer, a Republican who surprised her party when she decided to expand Medicaid four years ago, is urging Congress to save the expansion, which has provided coverage to 400,000 Arizonans.

Brewer said cutting Medicaid eventually will cause private insurance premiums to rise because people losing coverage will seek treatment in hospital emergency rooms.

"We're going to pay for it one way or another; there are no free lunches," she said in an interview with The Associated Press.

A spokesman for Arizona's current governor, Republican Doug Ducey, said the governor was studying the GOP bill.

Alaska Gov. Bill Walker, a Republican-turned-independent, said in a statement Thursday that he is still reviewing the Senate plan, but had some worries about how it might affect his vast and sparsely populated state, where health care costs are high.

"I am deeply concerned about the potential effects of a one-size-fits-all approach," he said.